Carillion profits down in first half

Support services firm Carillion has confirmed predictions that its profits will be lower in the first half of the year.

The firm said trading in the first six months of 2012 had been in line with expectations and profit and earnings were on track to meet full-year expectations, despite challenging market conditions.

It said total operating margins were expected to increase in the first half and it had total first-half new orders and probable orders worth up to £2.2bn.

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But Carillion warned that cuts in UK construction activity, together with the timing of project starts in the Middle East, meant total revenue would be lower than in the first half of 2011.

The company said the impact of the Middle East was exacerbated by its strategy to focus on large projects for a small number of "financially robust customers".

But it was bullish on its prospects going forward.

"Given the strength of our business model, order book and pipeline of contract opportunities, our medium-term targets remain unchanged," the firm said.

"[They are] namely to deliver ongoing growth in support services and to double our annual revenues in the Middle East and in Canada in the five-year period to 2015, in each case to around £1bn."